According to Doll, investor need to pay close attention to real-estate deflation.

"Inflation is a lagging indicator, and....inflation numbers are up, but we're writing off billions of dollars of credit from balance sheets. That's deflationary," Doll said in an interview on CNBC's "Squawk Box."

"We've been in a commodity price move up really for about six or seven years," Doll said. "We've been in a dollar decline for about five years, and while neither of these are great news for the inflation level, they've been going on for years and they haven't affected inflation in any significant way."

"These are the times when it's hard to pay bills, and that's why we're having so many credit problems," he said.

Doll said he expects its too early for stocks to make a broad move upward because there are still some lingering uncertainties in the market.

"When you have uncertainty, you have not only volatility, but you have low valuation levels," he said. "We need to start getting answers to some of the uncertainties: How big will the credit write-offs be? What will the economic weakness be? What will earnings look like? As the months go by, we'll start getting answers to some of those, and that's where we think valuations can move from, indeed, very low to, not high, but still more neutral, and that should give us a rally from the low. We're not there yet, but from the low."